Popular drone maker Lily Robotics has fallen victim to financial and legal troubles. The company has been sued by San Francisco district attorney in county court. The startup is being accused of engaging in false advertising and questionable business practices.

In a statement released this past Thursday, Lily Robotics announced its decision to shut down its operations but did not provide any explanation or comments about its current issues. The city of San Francisco has been granted the permission to seal the company's bank accounts. This has been done to ensure that its funds are used only to pay employees or to issue refunds.

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In an email to its customers, Lily Robotics said that it is unable to secure funding to manufacture its first drone. The company was reportedly looking to raise an additional $15 million funds, in addition to $15 million it had raised in December 2015.

"Over the past few months, we have tried to secure financing in order to unlock our manufacturing line and ship our first units--but have been unable to do this," Lily Robotics co-founders Henry Bradlow and Antoine Balaresque wrote.

Lily Robotics has raised $34 million through pre-orders. However, it failed to meet its commitments.

The firm released an impressive YouTube promo video in 2015. The video was highly publicized while the firm founders were included in prestigious "Forbes 30 under 30" list in the same year.

Lily Robotics had promised to create a drone which was far ahead of its peers. The company said the drone would be equipped with the capability to take sharp pictures while evading various impediments in its way. The device was also going to be water resistant.

Lily Robotics has said that It will refund the $34 million it has received through pre-orders.